Core Viewpoint - The overall decline in corporate profits has narrowed in July, showing a differentiated structure primarily due to profit recovery driven by "anti-involution" policies, supply contraction, price increases, and support from high-end manufacturing demand, while downstream consumer demand remains weak, leading to marginal profit shrinkage in downstream industries [1] Summary by Relevant Categories Corporate Profit Trends - In July, the decline in corporate profits showed signs of narrowing, indicating a potential recovery phase [1] - The recovery is largely dependent on supply-side adjustments and price increases rather than robust consumer demand [1] Structural Analysis - The profit recovery is characterized by a structural divergence, with some sectors benefiting from high-end manufacturing demand while others face challenges due to weak downstream consumption [1] - Downstream industries are experiencing marginal profit shrinkage, highlighting the uneven nature of the recovery [1] Inventory Cycle and Policy Impact - The current inventory cycle is marked by proactive destocking driven by policy measures [1] - For a comprehensive recovery in corporate profits, there is a need for policy initiatives to stimulate downstream demand, transitioning from structural recovery to a broader profit rebound [1]

Core Viewpoint - The overall decline in corporate profits has narrowed in July, showing a differentiated structure primarily due to profit recovery relying on "anti-involution" policies leading to supply contraction and price increases, alongside demand support from certain high-end manufacturing sectors. However, downstream consumer demand remains weak, causing marginal profit shrinkage in downstream industries. The current inventory cycle is characterized by proactive destocking driven by policies. A comprehensive recovery in corporate profits will require policy efforts to boost downstream demand, transitioning profit recovery from structural to comprehensive [1]. Summary by Sections - Corporate Profit Trends: The decline in corporate profits has slowed down, indicating a potential recovery phase influenced by specific policies and market conditions [1]. - Structural Differentiation: The recovery is uneven, with high-end manufacturing benefiting while downstream sectors face challenges due to weak consumer demand [1]. - Inventory Cycle: The current phase is marked by proactive destocking, suggesting a strategic approach to inventory management under policy guidance [1]. - Future Outlook: A full recovery in corporate profits hinges on policy measures aimed at stimulating downstream demand, which is essential for transitioning from structural recovery to overall profit growth [1].